What Is a Put Option?Put Option Kya Hai?
Understand the put option and how its payoff mirrors the call.Put option aur uska payoff call ka ulta kaise hai, samjho.
📖 LessonLesson
A put option (PE) gives the buyer the right, but not the obligation, to sell the underlying at the strike on expiry. For cash-settled NIFTY, the put buyer receives the difference if NIFTY settles below the strike.
- The buyer pays a premium and benefits if NIFTY falls enough below the strike. Puts are also used to protect (hedge) portfolios.
- The seller receives the premium and must pay the difference if NIFTY settles below the strike.
Put buyer's value at expiry = max(0, strike − NIFTY settlement). Profit = value − premium paid.
Put option (PE) buyer ko expiry par underlying ko strike par bechne ka right deta hai, obligation nahi. Cash-settled NIFTY me, NIFTY strike se neeche settle ho to put buyer ko farq milta hai.
- Buyer premium deta hai aur fayda tab jab NIFTY strike se kaafi neeche aaye. Puts portfolio protect (hedge) karne me bhi use hote hain.
- Seller premium leta hai aur NIFTY strike se neeche settle ho to farq chukata hai.
Expiry par put buyer ki value = max(0, strike − NIFTY settlement). Profit = value − diya hua premium.
Hypothetical: Buy one NIFTY 25,000 PE at ₹110 (cost ₹7,150). NIFTY settles at 24,700 → value ₹300 → profit (300 − 110) × 65 = ₹12,350. If NIFTY settles at or above 25,000, the loss is the full ₹7,150.Hypothetical: Ek NIFTY 25,000 PE ₹110 me kharido (cost ₹7,150). NIFTY 24,700 par settle → value ₹300 → profit (300 − 110) × 65 = ₹12,350. NIFTY 25,000 ya upar settle ho to loss poora ₹7,150.
🛠 Practise itPractice karo
⚠️ Common mistakesCommon galtiyan
- Thinking “put” means you are selling — buying a put is a separate position from selling a call.“Put” ka matlab sell karna samajhna — put kharidna, call bechne se alag position hai.
- Buying puts after a big fall when premiums are already expensive, without checking volatility.Bade girne ke baad mehenge premium par puts kharidna, volatility check kiye bina.
- Selling puts thinking “the market always comes back”.“Market hamesha wapas aata hai” soch kar puts sell karna.
✅ Quick quizQuick quiz
Score 2 out of 3 or more and the lesson is marked complete automatically.3 me se 2 ya zyada score karo, lesson apne aap complete mark ho jayega.
📝 SummarySummary
- Put = right to sell at the strike.Put = strike par bechne ka right.
- Buyer gains when NIFTY falls below strike − premium.Buyer ko fayda jab NIFTY strike − premium se neeche jaaye.
- Puts can hedge a portfolio against falls.Puts portfolio ko girawat se hedge kar sakte hain.
📚 Sources & market rules usedSources aur market rules
- NIFTY lot size: 65 — from the January 2026 contract series. NSE circular FAOP70616 (3 Oct 2025)
- NSE — equity derivatives
Last reviewed: 2 November 2026 · Version 1.0 · Prepared by the SmaartAlgos Academy team.Last reviewed: 2 November 2026 · Version 1.0 · SmaartAlgos Academy team dwara taiyaar.
Education only. SmaartAlgos is not a SEBI-registered investment adviser or research analyst. Nothing in this lesson is a recommendation to buy or sell any security. Options trading involves substantial risk of loss. Examples are hypothetical or simulated; market rules are shown with their effective dates — always confirm the latest official circulars.
Sirf education. SmaartAlgos SEBI-registered investment adviser ya research analyst nahi hai. Is lesson me kuch bhi kisi security ko buy ya sell karne ki salah nahi hai. Options trading me bada loss ho sakta hai. Examples hypothetical ya simulated hain; market rules effective date ke saath diye gaye hain — hamesha latest official circular confirm karo.